D. R. VENKATACHALAM v. DY. TRANSPORT COMM.

392 A ###### n ##### c D E F G II DY. T/{ANSPORT Cf>MMISSIONER & OTHERS _December_ 10, 1976 [A. N. RAY, C.J,, M. H. BEG AND V. R. KRISHNA lnR, JJ.] - _Motor Vehicles Rules,_ _r._ _155-A, vires of, whether against public_ _iQterests_ _whether_ _coRtradicts_ _or impliedly_ _repeals_ _proviso_ _to_ _s._ 47(0 _of_ _the_ _Motor_ _Yehicles_ _Act,_ 1939-E~presjio _unius est_ etclusi~ _alterius. applicability_ _of._ The aPpellants-, private stage carriage operators, applied for the renewal of their ·expiring bus permits. The respondent State Transport Uhdertaking objected, urging preferential grounds in its own favour, claiming to ha\'e' secured higher marks ·with the ·aid of r.-tj:5-A of the lvlotor Vehicles Rules. 1-be State Transport Undertaking's claim v.·as upheld. Tue appellants moved the appellate Tribunal, and also filed a writ petition before the High Court ·tor directions to the appellate Tribunal to dispose of his appeal without-relying on r. 155-A. The writ·Ntition was 'dismissed by a Single Judge,.and an appeal before the Division· Bench ·a1s6'"failed.' - - - - - Jn appeal by Special Leave, the appellants assailed the validity of r. 155-A on the grounds of its being partial to the Government against public intere~t an.I co!1~.~icti!1g the pro~iso ~o ~· 47(1) of the ~1ot;>r yehicles Act, 1939. Dismissing the appeals, the Co\1rt, ~ELD: _(Per_ K~ishna _Iyer I. for himself_ ~nd ~n be~alf of~· _N._ _Ray_ CJ.) 1. The assignment of mark~ under r. 155-A is geared to pubFc interest, v1hich i$ the desideratum of s. 47(1) of the ·Act. This is not an arbitrary stroke of favouritism because there arc many promotional factors bearing on · the interest o! the travelling public v.•bich a State enterprise _qua_ State enterprise will, but a private enterprise _qua_ private enterprise will not take care of. There ~g is· equity system in r." _vi1 a_ 155-A," _vi's_ lnaking .a government up, _as_ it transport does,' for !crvicc. the present [398~, short 399B] falls iH the 0 _P. Kumaralwamy_ v. _State fransport A.pp.eltate Tribuntil, Madrav_ &:. _A.11r._ (1976] 2 SCR. 214 referr¢ to. ___ The_ Court_ _obsened_ : Le:al Darwinism, adapting the rule of law to new societal developments, so as to surTive ~nd serve the soc~l order, i3 n~ce~ary. [398B] _Cardozo:_ _The_ _nature_ _of_ _the_ _Judicial Proce.,s:_ _Yale_ _University_ _Press:_ _pp._ 151-152, relied upon. 2. There cannot be any conflict betweeri s. 47 ( 1) proviso and the impugned rule. Tue proviso does not carry any negative injunction that tran~port tribunal shall not J?iVe anv other preferential consideration than what is stated in it. There is no implied interdict that in other contingencies no preference· shall be accorded. The proviso merely takes. care of a specific situation. MOfeovet. the- markin2 formula does not deprive the administrative tribunah of their discretion to choose the best (399C-E] _Per H._ _M._ _Beg._ _J._ (Concurring) Where there is a sinJ?le specified mode laid dowii. for-' doing something: in exercise of the legal power to do it, the specified mode may, negatively op~rate. ' D. jl. VENKATACHALAM & ORS. #### _v._ D. R. VENKATACHALAM _V._ DY. TRANSPORT COMM. 3 93 _(Krishna Iyer,_ _!.)_ as a prohibition against what is not prescribed ar all and is outside che statute. Bnt _expressio unius est_ exclu~io _alterius_ could not apply ot a case where two modes of doing the same thing are provided for by a statute itself. Here both chapters IV and IV-A enable plying of State tran<port as well as priv~ttely owned vehicles on hire on same routes, but the grounds for these combined operations und.er the two chapters are different. [403A, C, DJ _Parbhani Transport .Co-operative Sodety Ltd.,_ v. _The Regional Transport_ _Authority, Auranirabad_ & _Ors._ [1960] (3) SCR 177, applied. _Nazir_ _Ahmad_ v. _King Emperor_ (1936) L.R. 63 I.A. 372, distinguished. _Colquhoun_ v. _Brooks_ (li81) 21 Q.ll. 52 at a' 65; _Taylor_ v. _Taylor_ (1876) 1 Ch. D. 426 at 430 and Crawfords "Statutory Construction" 1940 Edn., Chapter 18, paragraphs 157 to 158, pages 240-244, referred to. A B CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1178##### 1180/76. c Appeals by Special Leave from the Judgment and Order dated 22-9-1976 of the Madras High Court in Writ PetitiOn Nos. 3059/ 75, W.A. No. 339/76 and W.P. No. 14 respectively. _Y._ S. _Chiale,_ _V._ _Subramanyam_ and _Vineet Kumar_ for the Appellant in C.A. 1178/76. D _K._ S. _Ramamurthi, M._ _N._ _Rangachari,_ _A._ _R._ _Ramanathan,_ _N.._ _Thimmalai, Jayaraman,_ _M. M._ _L._ _Srivastava_ and _A._ _T. M._ S. _Sam-_ _path_ for the Appellant in CAs. 1179-1180/76. _V._ _P._ _Ra.man,_ Addl. Sol. Gen. (In CAs. 1178 to 1180/76, _D._ _N._ _llfisra,_ _J._ _B._ _Dadachanji_ for Respondent No. 2 in CAs. 1178 & 1180 of 1976 and Respondent 2 in C.A. 1179 /76. E _K. Parasaran,_ _Adv._ _Genl._ _Ta.mil_ _Nadu,_ _A._ _V._ _Rangam,_ _T._ _Sathia-_ _dev_ and _(Miss)_ _A._ _Subhashini_ for .Respondents in CAs. 1179-80 except Transport Corporation. _K._ _Jayaram,_ _V._ _T._ _Gopalan_ and _K._ _Ram_ _Kumar_ for the Applicant and Intervener in C.A. 1178/76. The Judgment of A. N. Ray C.J., and Krishna Iyer, J. was delivered by Krishna Iyer, J. M. H. Beg, J. gave a separate concurring opinion. KRISHNA IYER, J. A terse presentation of the twin contentions canvassed before us, in these appeals by specral leave, after discomfiture at two tiers below, highlights the importance of the economic role· of the State in undertaking, with legal preferences, strategic services vital to the community. The keynote thought underlying our decision is that the jural postulates of the old competitive order have !~ yield place to the new values of developmental jurisprudence. Public law, in India, responding tci the public needs and the State's functional role mandated .by the Constitution, has evolved new approaches to old probiems and given up dogmas which once prevailed during _laissez_ _faire_ days but now have become obsolete because of the 'welfare' economy which has been nurtured. This radical change in jural F G H A B #### c D E F G H 394 SUPREME COURT REPORTS (1977] 2 S.C.R. perspectives has its hnpact on canons of statutory construction and on verdicts. about t~e _vires_ ~f legislation. All these. ~eneralities acquire appropnate apphcat10n m the present cases which arise under the Motor Vehicles Act, 1939 (Act IV of 1939) (the Act, for short) from challenges before the High Court without avail, by private operators, of the permit granted to the State Transport Undertaking (STUJ by the transport tribunals. The validity of r. 155A of the Motor Vehicles Rules framed under s. 68 of the Act is in issue. The core of counsel's submissions is two-fold : ( 1) ls rule 155A, a&signing five ma_rks for a State undertaking, not fatally violative of s 4 7 of the Act ? Does the later amendment to the proviso to s. 4 7 giving preference to State transport systems, other things being equal, impliedly repeal, as contrary to its cCYntent, rule 155A which gives better advantage to the favoured category, fulfilling the spirit of the statutory amendment more tellingly? We will proceed further after stating the circumstances leading up to th(: writ petition before the High Court and the appeal before us. The appellants, who have come by special leave to this Court, are private stage carriage operators. We will relate the facts of one case (Civil Appeal No. 1178 of 1976) the decision in which will settle the fate of the rest, the decisive point of law being identical. The permit of the appellants' but on the route Salem to Erode was to have expired on September 13, 1974 and so he applied for renewal under s. 58(2) of the Act. The respondent-State Transport Undertaking objected to the renewal of the permit urging preferential grounds ill its own favour. The State undertaking's claim was upheld on the score that it secured higher marks computed with the aid of r. 155-A. Baulked in his applicatiCYn for renewal, the appellan~ challenged the order before the Appellate Tribunal. Apprehending an adverse decision on the strength of r. 155-A, he filed a writ petition before the High Court praying that a direction be issued to the Appellate Tribunal to dispose of his appeal without relying on r. 155-A. The plea was negatived by the learned Single Judge and a Division Bench dismissed the appeal therefrom. Aggrieved by the concurrent findings the appellant has assailed before us the vires of r. 155-A as obnoxious to public interest excluding, in some measure, a fair competition and neing contrary to the proviso to s. 4 7 ( 1) of the Act. A meaningful discussion of the points debated at the Bar has to begin with a brief outline of the scheme of the Motor Vehicles Act in the branch relating to grant of permits for transport vehicles (Chapter IV). All transport vehicles, before they can be plied in any pub lic place, require permits under s. 42 and even goverment vehicles, if put to commercial use, have to possess permits. Applications are made for stage carriage permits under s. 57 and the considerations germane to their grant are set out in s. 47 of the Act. It is common ground, and decisions are legion in support thereof, that the interest of the public generally is the super-consideration decisive of the award of permits when there is a plurality of applicants. He who can serve the public best gets the permit to ply the stage carriage from the quasi-judicial authority charged with the responsibility for choice. We may read the relevant part of s. 47(1) here: D. R. VENKATACHALAM _V._ DY. TRANSPORT COMM. 395 _(Krishna Iyer,_ _J.)_, "47. Procedure of Regional Transport Authority in considering application for stage carirage permit,- A ( 1) A Regional Transport Authority shall, in considering an application for a stage carriage permit, have regard to the following matters, namely :(a) theA interest of the pubhc generally; x x x Provided that other conditions being equal, an application for a stage carriage permit from any State Transport Undertaking or a Cooperative Society registered or deemed to have been registered under any enactment in force for B the time being shall, as far as may be, be given preference C over applications from individual owners. x x x x" 'The interest of the public generally', is often-times too vague and, generally, the exercise of discretion deserves to be canalised to guide the statutory bodies and to facilitate better appreciation by the appli· cants of the claims that may ordinarily be considered by transport tri- D bunals. From this angle, the Tamil Nadu State has framed rules, expressly subordi11ated to the paramount factor of public interest which shall weigh with tribunals when adjudging among competing claimants. This Court, in _Kumaraswamy_ ('), summed up the purport of the rule thus : "The system of marks, under the Rules framed under the Act by the Tamil Nadu Government, prescribes the various qualifications for applicants for permits for passenger transport under the Motor Vehicles Act. Rule 155-A crystallises these considerations and describes them as _guiding_ _principles_ for the grant of stage carriage permits. The rule itself emphasizes what is obvious, that the paramount consideration of the interest of the public, as enshrined in Section 4 7 ( 1), must be given full weight while awarding per mits. That means to say that _the various factors set out in_ _rule_ 115-A _are subject to section_ 47(1). This is clarified by sub-rule (4) of Rule 155-A, which runs thus: ''After marks have been awarded under sub-nile (3), the applicants shall be ranked according to the t~tal marks obtained by them and _the applicatiotts shall be disposed_ _of_ _in accordance with the provisions_ _of sub-section_ (1) _of_ _sec-_ _tion_ 47." There is no doubt that bU.S transport is calculated to benefit the public and it is in the fitness of things that the interest of the travelling public is highlighted while evaluating the relevant worth of the various claimants." Rule 155A(3)D(l) offends against the prescription in the proviso (I) [!976] 2 S.C.R.214. E ## ' G H A B #### c D E F G H 396 SUPREME COURT REPORTS [1977] 2 S.C.It. to s. 4 7 ( U and is void, according to counsel for the appellants. Before examining this alleged vice, we may as well read sub-rule (3) of Rule 155-A to the extent necessary : "(3) After eliminating in the manner laid down in subrule (2), the applicants who are unsuitable, marks shall be awarded for assessing the different qualifications of the re##### maining applicants for the grant of permits as follows : (A) _Residence.-Two_ marks shall be awarded to the applicant who has his principal place of business or permanent residence at either terminus or on the route. _Explanation.-The_ term 'principal place of business' shall mean only the registered headquarters of the company and not the residence of the Managing Director or any other Director of the Company. (B) _Technical_ _qualification_ _(for_ _Owner_ _or_ _Managing_ _Directorl.-Two_ marks shall be awarded to the applicant if the Owner or the Managing Director of the organisation has technical qualification which may be useful to run the transport service efficiently. (C) _Workshop facilities.-Two_ marks shall be awarded to the applicant who is in possession of workshop facilities as given in Explanation under item ( 2) (iv) . (D) (i) Five marks shall be awarded to the applicant falling within the proviso to clause ( c) of section 62-A of the Motor Vehicles Act, 1939, i.e., State Government, Central Government or any Corporation or Company owned by the Central Government or State Government. (ii) The applicant who operates not more than nine stage catTiages excluding spare buses, shall be awarded ##### marks as follows : ( 1) Applicant operating one to three buses-4 marks. (2) Applicant operating four to six buses-3 marks. (3) Applicant operating seven to nine buses-2 marks. Provided that if a new entrant has made an application for a short route other than town service route, no marks shall be awarded to any applicant under clause (B), (C) and (D)(iil." The ground of invalidation urged is that there is no justification for grant of 5 marks to an applicant falling within r. 155A (3) (D)(l) solely for the reason that it is owned by the State Government. Ownership is irrelevant and the sacrifice of public interest at the altar of government interest is contended to be a flagrant partiality shown by \he subordinate legislation in the teeth, and transgressing the limits, of the equal consideration implicit in s. 47 (1). The second argument D. R. VENKATACHALAM _V._ DY. TRANSPORT COMM. 397 _(Krishna Iyer,_ J.) is that the proviso to s. 47(1), as amended by Act 48 of 1974 (Tamil A N\ldu Amendment Act) gives preference to a State Transport Und1<rtiling, _other things being equal,_ and impliedly provides against any larger preference being shown to such an undertaking in the guise of rules. For this reason, the generosity of the rule being contrary to the narrow preference in the proviso to the section (brought in by later amendJUent), the former cannot co-exist with the latter and must be taken as impliedly repealed. Although this amend8 ment to the Act was later than the promulgation of the rules, the lawas it stands today is the basis of our judgment. Thus the two questions formulated right at the beginning of the judgment arise in the settinl!: of facts and law we have broadly described above. l It was urged by Shri Chitale, followed by Sliri Ramamurthy, in two of the several matters heard together, that Part IV A provided for monopolistic award of permits to the State Transport Undertaking but Part IV put everyone on a competitive basis, ·regardless of whether one was a State undertaking or not, the most meritorious winning the battle in a free market economy. If the soul of Part IV were free competition, not 'rigged' selection,- aid in the shape of extra marks given by rules had to be withdrawn and every applicant had to run without anyone being given a handicap in the race. State undertakings being awarded _5_ grace marks for no reason except that they belonged to the State was a gross violation of the spirit and letter of s. 47(1) which postulated the promotion of public interest as the basic - consideration and the selection of the ablest as the criterion for choice. Both counsel, in their overlapping arguments, stressed that there WM a negative mandate in the proviso to s. 4 7 ( 1) not to prefer a State undertaking save where other conditions were equal and if the State undertaking was unable to attain the condition of equality with another, its claim could not be promoted by the artifice of assil;mnenl'. of marks to a State undertaking _qua_ State undertaking. Public Jaw, in our pie-bald economy and pluralist society, responds to societal challenges _limi_ constitutional changes. To miss the ideological thrust of our Constitution and the economic orientation of our nation while construing legislation relating to public law and scanning them for their valiqity is to fail in understanding the social philosophy that puts life and meaning into the j:>rovisions of the Act. The law, being realistic, reckons with the socialist sector covering State and co-operative enterprises. The special status of a government-owned transport undertaking in a Welfare State is obvious. It has large resources to cater to the traffic needs. It has, within its range of influence and coordination. many services useful to the travelling public, which may be beyond the reach of private ownership. Its functional motto is not more profits at any cost but service to citizens first and in a far larger measure than private companies and individuals, although profitability is also a. factor even in public utilities. Its sensitivity to community welfare and encouragement of labour participation, its accouatability to the Government, the legislature and the public put it in a category by it~clf. It is socially conscious, not profit obsessed. We are aware of the shortfalls of some public-sector undertakings in some respects ##### c D E F G H A B #### c D E F G H 398 SUPREME COURT REPORTS [1977) 2 S.C.R. but it needg little argument to hold that to classify State transport systems on a separate footing is realisic and is ordinarily no sin before the principle of equality before the law'. The legislative body has done, in the given circumsitances, what it thought was sound policy and we find no vice in the policy. To classify what is conceptually and operationally different into a separate category is intelligence, not impertinence. The judicial art of interpretation and appraisal is imbued with creativity and reallsm, especially where fundamental changes have been wrought by the Constitution in our approach to public sector enterprises. Legal Darwinism, adapting the rule of law to new societal developments, so as to survive and serve the social order is necessary : "That court best serves the law which recognil:es that the rules of law which grew up in a remote generation may, in the fullness of experience, be found to serve another generation badly, and which discards the old rule when it finds that another rule of law represents what should be according to the established and settled judgment of society, and no considerable property rights have become vested in reliance upon the old rule. It is thus great writers upon the common law have discovered the source and method of its growth, and in its growth found its health and life. It is not and it should not be stationary. Change of this character should not be left to the legislature. If judges have woefully misinterpreted the _mores_ of their day, or if the _mores_ of their day are no longer those of ours, they ought not to tie, in helpless submission, the hands of their successors." (Cardozo : The Nature of the Judicial Process : Yale University Press: pp. 151-152). This refreshing perspective guides us to look at the submissions advanced. Both the contentions can be shot down by three considerations. Firstly, a State enterprise, in a truly Welfare State, is charged with a social consciousness and responsibility for its citizens, an attention to serve them and a willingness to embark on public uti- ~ lity undertakings better to fulfil people's demands. The public sector enterprises are expected to be model employers and model servants, planning their budgets, subjecting themselves to public audit and criticism and inquest by legislative committees and the Houses of the legislature. Profits are their concern but, more importantly, public weal is their commitment. Such is, the philosophy of the State sector in our socialistic pattern of society. Article 19 ( 6) (ii) and Art. 38 of the Constitution, s. 4 7 ( 1), especially the proviso, and Chapter IV A of the Act (now governed by the impregnable Ninth schedule to the Constitution) throw light on this policy of the paramount law. Here, therefore, the rule making authority, having regard to all relevant circumstances, has decided to award to a State Transport Undertaking _5_ marks. This is not an arbitrary stroke of favouritism because there are many promotional factors bearing on the interest of the travelling public which a State enterprise _qua_ State enterprise will, but a private enterprise _qua_ private enterprise will not, take care of. D. R. VENKATACHALAM _V._ DY. TRANSPORT COMM. 399 _(Krishna Iyer,_ J.) After all, private enterprise has its primary motivation in profit, although, under State direction, it is becoming socially responsive. The superiority in many respects (not _all_ respects) of State lransport Undertakings, in the legisla~ve judgment, has led to r. 155A. This classification has noetic nexus with and rational relation to the obiect of augmenting the good of the passenger community. The theory, rooted in the obsolescent _laissez faire_ economics, that only cold competition among claimants to run businesses brings out the best operator has serious limitations in fields where the focus is on public service, not gains of business. Public law, adapting itself to this socio-economic view, shifts its emphasis. This is what we have earlier called legal Darwinism. We, therefore, hold that the assignment of marks under r. 155A is geared to public interest, which i.;; the desideratum ·of s. 47(1) of the Act. We now move on to an examination of the alleged fatal incompatibility between the proviso to s. 47(1) and 1:. 155A. This second submission of counsel is a trifle mystifying. There cannot be a contradiction without dictioo. Unless s. 4 7 (1) proviso carries a negative injunction that transport tribunals _shall not_ give any other preferential consideration than what is stated in it, there cannot be anv conflict between it and the impugned rule. The proviso to the section does nothing of the kind. It merely takes care of a specific situation. Where a State Transport Undertaking and a private operator are ·equally balanced, the scales, may be tilted in favour of the former. There is no implied interdict that in other contingencies no preference shall be accorded. It is not a 'Thus far and no further'. .Indeed, the spirit of this proviso has been carried further by the rule, having regard to the realities of the total transport system plying in the State. A B c D E j The third consideration which silences the appellant's charge of violation of s. 47 is that the marking formula does not deprive the administrative tribunals of their discretion to choose the best. The consternation of the private entrepreneurs that by manipulating the marking mechanism the State undertaking, regardless of its demons- F ·trable inferiority of public service, will knock off all the permits, paralysing the power of the Tribunal to pick and choose, by the over wheiming and \inevitable\ superiority of marks, is misplaced. The fear is falsified if we read the rule aright. It has, written on its face, its own limitation. Marks shall guide, not govern the award. Full discretion, to some extent, canalised by the marking procedure, still vests in the Transport Authority. For, the marks, these authorities G will remember, sway the exercise of judgment, not supersede it. It is conceivable that the pecularities of a route, the calamitous performance in an area of a State transport system, the outstanding special facilities of a particular private operator or other like feature may outweigh the mechanics of marks. After all, many qualifications, advantageous to the travelling public, may be thought of, untouched by the rigid marking moulds. They are not irrelevant and may still be H regarded by the tribunals. All this leads to the conclusion that marks shape but do not clinch the ultimate selection. The public is the ·consumer; its plenary service is the final test. Therefore, these is A **8** 400 SUPREME COURT REPORTS (1977] 2 S.C.R. .qot.hin.g in r. 1~5A deprivatory of the discretion vested by s. 47 (1). This mterpretatlve footnote: must allay the apprehensions voiced by counsel. Nor are we convmced that there is no possibility of a private operator exceeding the minimum marks of a State Transoort Undertaking. Moreover, the marking formula lacks flexibility. Merely because the State Transport Undertaking has no 'residence'· or wor~shop on the route, although its attention and ability to react are considerable, why should it suffer a marks-created handicap ? There is eq~ity in r. 1~5A, making up, as it does, for the present shortfalls m the markmg system _vis a vis_ a government transport service. The appeals, for these reasons, must suffer dismissal. There will be no order as to costs. C BEG, J. I agree with the conclusion reached by my learned brother Krishna Iyer. As arguments in this batch of cases seem to raise some questions which I, speaking entirely for myself, consider to be really outside the sphere of the law which we have to interpret and apply, I would like to make some observations on the implications of these questions argued after stating my reasons for agreeing with my learned brother. **D** E **F** G **H** Mr. Chitaley's first argument for some of the appellants raised only what may be described as "normal" legal questiO'IlS of construotion or interpretation (there is some difference between these two allied processes as will appear from Crawfords "Statutory Construction", 1940 Edn., Chapter 18, paragraph 157 to 158 pages 240-244), as to whether Rule 155A(3) (D) (i), reproduced in the judgment of my learned brother Krishna Iyer, gives effect to or conflicts with Section 47 of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act'). It was urged by the learned Counsel that what can be done only by resorting to Chapter IV-A of the Act, by framing a scheme for partial or complete nationalisation of the routes involved, cannot be accomplished by framing a rule only ostensibly purporting to give effect to Section 4 7 ( 1) of the Act or the proviso to it. In ultimate analysis, the rule of construction relied upon by Mr. Chitaley to make the last mentioned submission is : _"Expressio_ _u11ius_ _est exclusio alterius"._ This maxim, which has been described as "a valuable servant but a dangerous master (per Lopes J., in Court of Appeal in _Colgwwun_ v. _Brooks(')_ fiI~ds expressio~ also in a rule, formulated in _Taylor_ v. _Tay/or,(_ _[2 ]_ _)_ applied by the Pnvy Council in _Nazir_ _Ahmad_ v. _King,_ _Emperor(')_ which has been repeatedly adopted by this Court.. That rule. sa~s th.at an exp~e~s~y laid, doym mode of doing somethmg necessanly implies a proh1b1tion of domg it in any other way. The maxim from which the rule in _Taylor_ v. _Taylor(supra)_ is derived and the rule itself were discussed and explained by this Court in the _Parbhani_ _Transport_ _Co-oper_ative_ _Society Ltd._ v. _the Regional Transport_ . _Authority, Aurangabad_ _&_ _Ors.,_ ( •) · with specific reference to the argument advanced there that,. (I) (1881) 21 Q.B.D. 52 at 65. (3) (1936) L.R. 63 IA 372. (2) (1876) 1 Ch. D. 426 at 430. (4) [1960] (3) S.C.R. 177. D. R. VENKATACHALAM _V._ DY. TRANSPORT COMM. _(Beg,_ J.) 4 0 1 as Chapter IV-A is meant for running its own buses by the State by A nationalisation of Motor Vehicle Road Transport Services, it was not open to the State to apply for permits at all under Chapter IV of the Act which applies to private operators only. This argument, repelled by this Court there has been put forward before us in a somewhat different and attenuated form by Mr. Chitaley. Nevertheless, the basic rule 0£ interpretation submitted to us is the same as the one which was relied upon in this Court in the _Parbhani Trans-_ B _port Co-operative Society's_ case (supra) in an attempt to exclude the State Transport Undertaking altogether from entry into what was sought to be made out to be the exclusive preserve of private operators. Before us, it is contended that exclusion of private operators could only be brought about by resorting to a duly framed scheme, on appropriate grounds given in Section 68C of the Act, but not indiroctly by framing the kind of rule which has the effec<_t of excluding _C_ private operators from the sphere of open competition which, it is submitted postulates an initial equality of positions. This argument rests, as I will indicate below, on two erroneous assumptions : firstly, that Rule 155A(3) (D) (i) has the effect of eir;cluding private operators; and, secondly, that the proviso to section 47 (1) compels the permit issuing authorities to postulate or start by assuming an equality of conditions, as between private operators and a State D Transport Undertaking. Indeed, if they were to start with the assumption of equality they will have to give preference to the State Transport Undertaking straightaway because that is what the proviso requires. The mainstay of the arguments of learned Counsel for the appellants before,us, however, is that Rule 155A(3) (DJ (i) really has the effect of excluding the private operators altogether by making it impossible for them to ever obtain preference over the State E Transport Undertaking when it applies for a permit in competition against theni. The reply on behalf of the State is that no exclusion of private operators is either intended or brought about by an application of Rule 155A(3) (D) (i) of the Act. On the other hand, it is submitted that, as an ordinary operator and a State Transport Undertaking are, in many ways, so unlike each other· that, unless five marks were assigned to each application of the State Transport Undertaking, it could not c©mpete at all, on a fair and equal footing, with private operators, who are able to obtain straightaway two marks for residential qualifications, four marks if they are operating not more than three buses, and two marks for workshop facilities. Apparently, the residential qualification has reference to residence within the area in which the motor vehicles are to ply, and marks for workshop facilities are granted to operators who are able to show such facilities on particular routes, whereas the State Transport Undertakings, it is pointed out, will neither h·ave a residence within such an area nor may be able to show, in a particular case, workshop facilities on particular routes even though they may have better workshop facilities on the whole. Again, two marks are to be given to private concerns or organisations, plying on particular routes, if their owners or Managing Directors have certain technical aualificationg. It is pointed out that, as State Transport Undertakings do F G H A B ##### c D E F G H 402 SUPREME COURT REPORTS [1977] 2 S.C.R. not have individual owners or Managing Directors, for whom these marks could be allotted, even though they may have technically much better qualified personnel to attend to their motor vehicles, the impugned Rule 1SSA(3) (D) (i) could be justified as meant only to place State Transport Undertakings O'll a footing of possible equality with private operators in competing for permits to be granted under Section 4 7 ( 1) read with Section 42 ( 3) of the Act and to do no more. Furthermore, Rule 1SSA(3) (D) (i) occurs in a group for marks to be assigned on the basis of the number of vehicles run by the operators. In any case, it was submitted that it is a fair provision as a rough guide but is not decisive by any means. It seems to me that the contention advanced on behalf of the State that the impugned part of Rule _ISSA_ enables provisions of the proviso to Section 47(1), read with Section 42(3), to be worked in a manner in which the statutory provisions were -intended to operate and does not really authorise :a circumvention or infringement of the provisions of Chapter IV of the Act, is well founded. The manner in which provisions of Chapter IV of the Act were meant to operate in cases of competition between private operators and State Undertakings was explained in the _Parbhani Transport_ _Co-operative Society's_ case (supra) as follows (at p. 184) : "The Government has of course the power to do any business it likes and therefore the business of running stage carriages. We have earlier drawn attention to the change made in cl. (a) of S. 42(3) by the amendment of 19S6. Previously, ~t was not,necessary for the Government to obtain permits under s. 42(1) lfor buses that it intended to run as stage carriages. Since the amendment the Government can no longer run transport vehicles for commercial purposes w;thout obtaining permits under S. 42( I). Now the plying of buses as stage carriages is a commercial enterprise and for /such buses, therefore, under the sections as they stand, . the Government would require permits as any one else. That being so, the sections clearly· contemplate that the Government may apply for and obtain permits for its buses run as stage carriages. The rule applied in _Nazir Ahrmid's_ case (1936) L.R. 63, I.A. 372, 381) does not permit the ordinary meaning of s. 42, sub. s.(1) and sub. s.(3), cl. (a) to be cut down because of the provisions of Chapter IV A. The Act lays down two independent sets of provisions in regard to the running of buses by the Government, one under Chapter IV and the other under Chapter IV A. Chapter IV A was 'intended to give the Government, ~ special· advantage. When the Government chooses to proceed under that chapter, it becomes entitled as .a matter of right under s. 68F( 1) to the necessary permits. Under Chapter JV the Government does uot have any such advantage; it has to compete with other applicants, to secure permits to be able to run its buses. The powers under the two chapters are therefore different. To such a case the principle of _Nazir Ahmad's_ case cannot be applied". \ # ' D. R. VENKATACHALAM _V._ DY. TRANSPORT COMM. _(Beg,_ _J.)_ 4 0 3 ### . Both Chapters IV and IV A enable plying of State transport as, A well as privately owned vehicles on hire on same routes, but the grounds for these combined operations under the two chapters are different. The govermng pnnc1ple of Section 4 7 (1) is to preserve as free and open a competi,ion as possible in public interest, whereas the reason for allowing private operators upon a nationalised route may be broader one of publ!c policy which may favour a decision against sudden stoppage of privately provided motor transport, so as to avoid B wastage of national wealth, even though it takes the form of investments by individual entrepreneurs, or, its object may even be prevention of undue hardship to private operators. Other reasons for permitting combined services can be, given. It is, however, possible only under Chapter IVA to exclude private operators oompletely. But, unless any rule relating to provision of motor transport under chapter IV has that effect it cannot be asserted that what can be done only by resorting to Chapter IV A is being attempted under the provisions of Chapter IV. The rule 'in _Nazir Ahmad's_ case (supra) applies only to cases where there, is a single specified mode laid down for doing something in exercise of the legal power to do it. In that event, the specified mode may, negatively, operate as a prohibition against what is not prescribed at all and is outside the statute. But, it could not apply to a case where two modes of doing the same thing are provided for by a statute itself. Nor, as I have indicated above, coUid it be said that what is to be done under Chapter IV and what can be done under a scheme under Chapter IV A are really the same simply because, in a given case, the results of both may appear to be similar or even identical. Mr. Ramamurthi, appearing on behalf of some of the appellants, embarked on quite an ambitious argument built upon an elaboration of the theme that Chapters IV and IV A belong to two different fields or spheres. of action which cannot, so to speak, be allowed to mix, o·verlap, or collide. It was contended that the waters of what are, in the eye of law, two different streams of activity must not be allowed to mingle. If I am not mistaken, even the word "pollute" was used, in the flow of arguments, to describe, possibly in a light vein, the alleged inequity of an invasion by a State Transport Undertaking of the supposedly exclusive preserve of private enterprise. It was suggested that such a result would involve "pollution" of the domain of open competition, which is forbidden territory for State Undertakings intro-. duced as a consequence of another ideology or sphere of action found in Chapter IV A. It seems to me that to hear such an argument, advanced even in a lighter vein, is really rather surprising in view of the language of the statute and well known facts to which it is related. It is quite well known that ours is what is known as a "mixed economy". The highest norms of our law are embodied in our Constitution. Article 19 ( 6) (ii) of the Constitution clearly contemplates : "the carrying on by the State, or by a Corporation or controlled bv the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise". And, in order to fulfil the objectives of the Preamble to our Constitution, the Constitu D E F G H B #### c A B ##### c D E F G H 404 SUPREME COURT REPORTS (1977] 2 S.C.R. tional mandate, contained in Article 39(c) of the Constitution, which ~he State ~as to. carry out, may make it imperative upon the State, Ill appropnate crrcumstances, either to take over or nationalise motor transport on roads in an:x. region or area completely or to supplement the Transport Services provided by private operators with those provided by the State. It seems io me that neither · Chapter IV nor Chapter IV-A can be really put into two separate water-tight compartments so as to make it imperative either to exclude State Transport Undertakings from operating under the provisions of Chapter IV or to exclude private operators when a scheme under Chapter IV-A, which may itself provide for only a partial exclusion of such operators, is in force. In the face of the clear words of proviso to Section 4 7 (1) of the Act, enabling State Transpo1t Undertakings to provide Transport facilities in open competitien, and of Section 68(C) in Chapter IV-A of the Act, enabling "the exclusion complete or partial" of private operators from particular areas or routes, such an argument cannot be put forward at all before lL'! under some preconceived notions even after these very notions had been rejected by this Court in the _Parbhani_ _Transport Co-operative Society Ltd's_ case (supra). It is clear that the two chapters of the same Act are both intended to subserve "the interest of the public generally'' in any area in the country. That is the integrating or governing principle evident from the language of the Act itself in both Chapter IV and Chapter IV-A of the Act. An argument advanced on behalf of the appellant seemed to be that Rule 155A(3) (D) (i) results in defeating the mandate of Section 47(1) of the Act, that the Regional Transport Authority must, as explained repeatedly by this Court, keep "the interest of the public generally" in the fore-front. As already indicated by me, this argument really proceeds on the erroneous assumption that the mere fact that the State Transport Vehicles are given five marks would defeat public interest by excluding consideration of all facts except that the State Undertaking has applied for one or more permits on a particular route. As my learned brother Krishna Iyer has also pointed out, this is an unwarranted assumption. Rule 155A gives only guidance, but the totality of factors mentioned in Section 47 ( 1) really decide. It was suggested on behalf of the State Transport Undertaking that the obvious capacity of a State Undertaking to provide facilities which are beyond the reach of private operators, that its actions are subiected to such constant, vigilant, and rigorous control on behalf of the public, and that it is bound to be so free f:om any desire to make profits by sacrificing public interests or convemence of passengers that even if nothing else was considered, these presumed advantages would justify the award of five marks on each application of the State Undertaking for a permit. If ~his line of ~easoning was. c:omple tely accepted and oarried to its logical conclus1on, the pro_v1s10n for giving five marks to each application of the State Undertakmg would become quite otiose or unnecessary because, in that case, ~h~ State Undertaking would, bv relying merely on a presume4 supenonty for purposes of Section 47(1), get a preference automatically. Th~ pr~­ viso to Section 4 7 ( 1) of the Act would then, apart from makmg tt clear tl!at the State Undertaking can also apply for permits, for which _!_ D.R. VENKATACHALAM _V._ DY. TRANSPORT COMM. _(Beg, J.)_ 405 purpose Section 42(3) was enough, serve no useful purpose. Indeed, **A** if such a view were to be accepted, the first part of the proviso to Section 4 7 ( 1) would seem to rest on a false premise because there could be no case in which "other conditions" could ever be "equal" as between a State Transport Undertaking and a private operator. The State Transport Service would, in that case, always get a preference. For this reason, I do not think that this line of reasoning could be pushed too far. It has to be assumed, in view of the opening words of **B** the proviso to section 47(1), that there may be cases in which an application of the basic principle, contained in Section 4 7 (1) of the Act, may tilt the balance either in favour of the State Undertakin!! or the private operator. The proviso applies only where the State Undertaking could reasonably be deemed to be in a position of equality as regards comparative advantages offered by it. As there cannot, between such dis-similar operating units, be comparability of conditions C or advantages offered unless some rule is framed and applied which could make comparison reasonably possible, it seems to me that Rule 155A(3) (DJ (i) is justifiable on the ground that it makes what .is legally contemplated and permissible also practicable. The proviso to Section 47 (1) reads as follows: "Provided that other conditions being equal, an application for a stage carriage permit from any State Transport Undertaking or a co-operative Society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners." An examinati<Yl2 of this proviso shows that an equality of other conditions is contemplated before any question of giving preference, merely on the ground that the applicant is the State Transport Undertaking or a Cooperative Society, can arise. If other conditions are equal, then, undoubtedly, the choice as between such equals must, if the proviso is to be given effect, be made in favour of the State Transport Undertaking or a Cooperative Society automatically. That is how, in such a [1] case, Sec. 47(1) itself would be deemed to operate. .. The validity of the proviso is not challenged. Even if Article 14 were available for an attack upon it, as it is not during the current emergency, it is clear that the State Transport Undertaking does stand in a separate category. Therefore, it could be found entitled, for obviously good and intelligible reasons, to preference over private operators "other conditions being equal". The narrow question before Ult. Thus, appears to me to be nothing more than whether the impugned part of Rule 155A sub-sewes or violates the proviso. The proviso itself is meant to explain what public interest, as visuali5ed by Section 4 7 ( 1), requires. Hence it appears to me that the validitv of the impugned part of Rule 155A could be determin€d on purely legal grouirnls as a necessary corollary of the proviso to Section 47 (1). The impugned part of the Rule is there to make the proviso workable **:aad** not to defeat its provisions. **D** E F **G** **H** 406 SUPREME COURT REPORTS [ 1977] 2 S.C.R. A It is, however, becoming increasingly fashionable to start with some theory of what is basic to a provision or a chapter or in a statute or even to our Constitution in order to interpret and determine the meaning of a particular provision or rule made to sub-serve an assumed "basic" requirement. I think that this novel method of construction puts, if I may say so, the cart before the horse. It is apt to seriously mislead us unless the tendency to use such a mode of B construction is checked or corrected by this Court. What is basic for a section or a chapter in a statute is provided : firstly, by the words used in the statute itself; secondly, by the context in which a provision occurs, or, in other words, by reading the statute as a whole; thirdly, by the preamble which could supply the "key" to the meaning of the statute in cases of uncertainty or doubt; and, fourthly, where some further aid to construction may still be needed to resolve an uncertainty ##### c by the legislative history which discloses the wider context or perspec tive in which a provision was made to meet a particular need or to satisfy a particular purpose. The last mentioned method con;ists of an application of the Mischief Rule laid down in _Heydon's_ case long ago. D E F G H If we start from a theory as to what the real purpose or need is or could be, the danger is that we may be injecting a subjective notion or purpose of our own into what is, after all, a legal question of construction or interpretation, according to well recognised principles, although it may be necessary, in exceptional cases, to explain or fortify tlie interpretation adopted in the light of so well understood and well known a purpose or theory that we could take judicial notice of ;t. and refer to it. The exposition of the well known purpose or theoretical foul)dation must, however, generally, flow from and explain an interpretation adopted, on the strength of legally acceptable and . accepted canons of construction, if we are to avoid the danger of an _a priori_ determination of the meaning of a provision based on our own pre-conceived notions of an ideological structure or scheme into which the provision to be interpreted is somehow fitted. The path of judicial certainty and predictability has to be paved with well settled principles of construction and interpretation. We cannot let it develop into a slippery slope be-set with hazardous possibilities. The science of statutory construction ·and interpretation-I think can call it that-rests on certain systematised principles and rules of common sense, logic, and reason. It can not be transformed into a happy hunting ground for whatever may captivate the forensic or judicial fancy or become something akin to poetry without even . the attractions of euphony. For tl1e reasons given above, I find that, on an application of the ordinary and well recognised rules of interpretation, without resorting to any of the novel methods suggested by some of the arguments of learned Counsel for the appellants, the impugned part of · Rule 155A(3) (D) (i) is valid. I, therefore, concur with _my_ learned brother Krishna Iyer, and hold that the connected appeals and petitions before us mnst be dismissed. M.R. _Appeals_ _dismissed._